It is revealed from history of Sambalpur that Jharsuguda was known as “Jharguda” on the distant past.In the 16th Century Balram Dev of Chauhan dynasty established the Kingdom of Sambalpur. During the reign of Chhattrasai Dev the 7th King of this dynasty (1656–1688), Jharguda was a small settlement surrounded by dense forest infested with a man–eating tiger, ravaging the people of this area. Siva Singh, the grandson of Chhattrasai Dev, using his might Sword killed the tiger and brought relief to the people. In recognition Chhattrasai Dev awarded the area to Siva Singh as ‘Bhrutti’ or ‘Jageri’.The descendants of Siva Singh ruled the region un–interruptedly from 16th Century till the end of the 18th Century.

After this period the decline of Sambalpur state started due to aggression and occupation of Sambalpur by the Marahattas Bhonsle).In 1818 the British occupied Sambalpur State and Maharaja Sai was made the nominal king whereas the actual administration was done by British. Maharaja Sai died in 1826 and the British declared his widow Mohankumari as the ruler of the Sambalpur. The then Jamindar of Jharsuguda, Govind Singh Challenged the decision of the British and claiming himself to be the rightful heir to the throne of Sambalpur, he launched an armed rebellion. He was supported by Vira Krishna Rai of Khadial, Thakur Ajit Singh of Bargarh, Trilochan Rai of Pahadsingida, Jamindar of Vheden Abhadhuta Singh, Medini Beria of Kharamanga, Chandra Behera and Shikru Jamandar of Bamda Jamindari, Jagabadndhu Hota, Biju Daphadar, Damaru Kanda, Rehan Biswal and Narsingh Ghatu of Sambalpur, Hundreds of Gond Tribals also joined the rebellion.

This rebellion of Govind Singh against the British continued uninterruptedly (1827–1833). In 1833 the decessive battle took place between the British and Goving Singh on the vast field adjoining the Jhadeswar Temple where Goving Singh was defeated and was captured by Major Wilkinson. Govind Singh was awarded a prison sentence.Another claimant to the throne of Sambalpur Surendra Sai, Jamindar of Khinda had also launched an armed rebellion to press his claims to the throne. In 1837 he was arrested on the charge of dacoity and manslaughter because of his armed attack on the Jamindar of Rampur. After Judicial trial Surendra Sai and his brothers were awarded sentence to life in 1840 and were imprisoned in Hazaribagh Jail.

Gradually, the revolutionary activities in Sambalpur calmed down. The diplomatic British Government assured that Govind Singh would be appointed as Mafidar of Jharsuguda if he did not press his claim for the throne of Sambalpur. Ultimately Govind Singh, who was languishing in Jail and had lost many of the revolutionary associates, agreed to with draw his claims for the throne of Sambalpur. He was released from jail and was appointed as the Mafidar of Jharsuguda.The prominent followers and associates of the Govind Singh namely Shikru Jamadar, Binu Daphadar, Damru Kandha, Roshan Biswal and Narsingh Ghatu were hanged in August 1833 in Sambalpur Jail campus after a trial.

Similar was the fate of the associates of Surendra Sai who had supported him in his second phase of revolution (1857–1863). The Jamindar of Kulabira Karunakar Naik and Gountia of Singhabaga Ganesh Upadhyaya were hanged in Sambalpur. The Gountia of Patrapali Balvadra Das Birtia had attained martyrdom in Kudupali battle and so also Mitukumar the Gountia of Lajkura. Khaja Naik the brother of Kulabira Jamindir and his nephew Kanhei Naik along with many rebels also received life sentence. The Gond Sardar Gopal Dhurua of Dalki and Thakur Bhainsha of Kumdapali were also imprisoned. By 1884 Surendra Sai and his associates had either been executed or had been imprisoned and the armed rebellion in Sambalpur gradually subsided and the Britishers heaved a sigh of relief.

During 1884, the Bengal Nagpur Railway (BNR) was commissioned between Calcutta and Nagpur and a Railway Station was established at Jharsuguda. A post office and a police station were established at Jharsuguda in 1895.In 1905 Jharsuguda was brought from the central province and was included in Odisha.